ITC stock price gained 1.82% today to Rs 450.4 apiece after the company announced its Q1 results. The cigarettes-to-hotels conglomerate reported a 17.6% on-year increase in its standalone net profit for Q1FY24 to Rs 49 billion, whereas its EBITDA margin expanded by 325 bps on-year to 11% owing to premiumisation, pricing actions, strategic cost management and fiscal incentives. The demerger of ITC Hotel is expected to be completed within the next 15 months. ITC declared a swap ratio of 1:10 for the demerger. Shareholders of ITC will receive one stock of ITC Hotels for every ten shares held in the FMCG entity.
Should you buy, sell or hold ITC stock?
HDFC Securities
Add | Target price: Rs 450
“Both urban and rural markets witnessed robust growth. Rapid new launches, distribution revamp, and efficiency in the supply chain remain the core metric. The core business performance remains healthy, outperforming other FMCG peers. The recent stock run-up (~44% in LTM) limits further rerating potential. We maintain our estimates and value ITC on a SoTP basis to derive a TP of Rs 450. The implied target P/E is 24x Jun-25E EPS. Maintain ADD.”
Prabhudas Lilladher
Accumulate | Target price: Rs 478
“FMCG growth was ahead of industry and margins got a boost due to improving scale, lower raw material costs and PLI incentives, we expect calibrated margin expansion to sustain in coming years. Hotel outlook is positive (despite planned renovations) due to G20 and revival in business & foreign tourist travel. Near term outlook remains strong, we estimate 10.7% EPS CAGR over FY23- 25. ITC trades at 25.3x FY25 EPS with ROE/ROCE of 30%+/35%+ and ~80%+ dividend payout. Retain Accumulate.”
Centrum
Buy | Target price: Rs 486
“The hospitality industry is poised for strong growth due to a confluence of favourable factors. That said, we remain positive as ITC is placed to deliver stronger, competitive and profitable growth in years to come.We believe guided by its ITC-Next strategy, ITC is placed to deliver stronger, competitive and profitable growth ahead. We reiterate strong BUY, with a DCF-based TP of Rs 486 (implying 26x FY25E EPS).”